AUD/USD upside remains limited by the 200-day moving average this week

AUD/USD D1 29-05

The pair managed a break of the 0.6600 handle on Tuesday as buyers kept the recent upside momentum going, but the struggle for the most part this week remains trying to achieve a firm break/close above the 200-day MA (blue line) seen @ 0.6658 today.

The high posted earlier was 0.6665 but unless buyers can solidify enough momentum to get a daily break above that, the poke and prod just above the key level remains tepid at best.

If anything, buyers will have to also try and get past the 9 March high @ 0.6685 to really justify a proper break above the key daily level above.

However, that is likely to follow only if the dollar runs lower and that may only take place if the more positive risk mood keeps up - which is also a boost to the aussie.

In that sense, all eyes will be on Trump's announcement on China later today. As such, the market is expected to keep more cautious in European trading in the meantime.

From a technical perspective, the 200-day MA remains a key line in the sand for AUD/USD at the moment, holding the pair back from a potential rip higher. As for downside risks, they can defined by the 100-hour moving average which is at 0.6609 currently.

The supportive region from the Wednesday low and 200-hour moving average @ 0.6568-81 will also add another layer of defense for buyers in case there is a nudge lower later today.